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[2023] ZAFSHC 431
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National Director of Public Prosecutions v Springkaan and Others (4353/2023) [2023] ZAFSHC 431 (2 November 2023)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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SAFLII
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable: YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
Case
number: 4353/2023
In
the matter between:
THE
NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
Applicant
and
IZIZWEZIDIBENE
LAWRANCE SPRINGKAAN
1
st
Defendant
MANTOA
YVONNE MAHLOKO
2
nd
Defendant
GLORIA
CONSTANS SMITH
3
rd
Defendant
TIISETSO
MANUEL MAHLATSI
4
th
Defendant
MUNICIPAL
WORKERS RETIREMENT FUND
1
st
Respondent
NATIONAL
FUND FOR MUNICIPAL WORKERS
2
nd
Respondent
CORAM:
LOUBSER, J
HEARD
ON:
26 OCTOBER 2023
JUDGEMENT
BY:
LOUBSER, J
DELIVERED
ON:
2 NOVEMBER 2023
[1]
This is the return date of a
rule
nisi
issued by Daffue, ADJP in terms of section 26 of the Prevention of
Organised Crime Act (POCA)
[1]
.
In terms of the rule, the defendants, the respondents or any
interested persons were called upon to show cause on the return day
why the provisional order made by the court with immediate effect
should not be confirmed pending the outcome of the trial of the
defendants on the relevant charges, and pending the outcome of any
proceedings for a confiscation and/or a forfeiture order that
may
follow on the trial.
[2]
Having been duly served with the rule, the
1
st
,
2
nd
and 3
rd
defendants as well as the 2
nd
respondent are not opposing the confirmation of the rule. Service of
the rule on the 4
th
defendant has not yet been effected. It is only the 1
st
Respondent who is opposing the confirmation of the rule. It has filed
an answering affidavit to this effect. In this affidavit,
the 1
st
Respondent mentions that it does not want to get involved in the
criminal prosecutions or the issues between the applicant and
the
defendants, but that it is constrained to opposed the application as
the final order sought by the applicant would be unlawful
and
contrary to the provisions of the Pension Funds Act (PFA)
[2]
.
In this respect the 1
st
respondent obviously relies on,
inter
alia
,
its duty to take all reasonable steps to ensure that the interests of
members and the provisions of the PFA are protected at all
times
[3]
.
[3]
The provisional order made by the court reads as follows:
“
1.
Pending further order of this court, and in terms of section 26 of
the POCA, the following provisional order
is hereby issued with
immediate effect:
2.
This order relates to realisable property
as defined in sections 12 and 14 of the POCA and extends to:
2.1
An amount of R146 153.08 of the pension benefits of the First
Defendant, held by the First Respondent
under
membership
number 002[…] and reference number 150[…].
2.2
An amount of R125 865.17 of the pension benefits of the Second
Defendant, held by the First Respondent
under membership number 0[…]6
and reference number 120[…].
2.3
An amount of R164 977.91 of the pension benefits of the Third
Defendant, held by the Second Respondent
under membership numbers
518[…] and 516[…].
2.4
An amount of R924 702.97 of the pension benefits of the Fourth
Defendant, held by the First Respondent
under membership number
001[…] and reference number 510[…].
2.5
Any other realisable property of the Defendants held by or on behalf
of the Defendants by any
other person excluding necessities.”
[4]
The facts that gave rise to the provisional order are not in dispute.
They concern the unlawful
promotions of the defendants into various
positions within the Matjhabeng municipality. It is alleged by the
applicant that these
promotions took place within a scheme by the
defendants and one Makofane, who purported to be the acting municipal
manager, and
who effected the promotions and ensured that the
necessary salary adjustments were made for the new positions to which
the defendants
were unlawfully promoted.
[5]
The unlawfully promotions of each of the defendants meant that each
defendant earned a higher
salary, and the higher salary came with a
higher employer and employee contribution towards the pension fund.
The pension benefits
obtained by each defendant in this manner can
therefore be directly traced back to the unlawful promotions, the
applicant alleges.
[6]
It needs mentioning here that the trial of the defendants is still
pending, and they have not
been convicted on the charges relevant to
the alleged facts. All of the defendants are still in the employment
of the said municipality.
[7]
The provisional order was made in terms of section 26 of POCA. This
section provides that the
National Director may by way of an ex parte
application apply to a competent High Court for an order prohibiting
any person from
dealing in any manner with any property to which the
order relates. Such an order is referred to as a restraint order.
[4]
The section further provides that a restraint order may be made in
respect of such realisable property as may be specified in the
restraint order and which is held by the person against whom the
restraint order is made. Such an order may also be made in respect
of
all realisable property held by such person, whether it is specified
in the restraint order or not. It may further be made in
respect of
all property which, if it is transferred to such person after the
making of the restraint order, would be realisable
property.
[8]
At the hearing of this matter for either a
confirmation or a discharge of the
rule
nisi,
I
was referred by counsel appearing for the 1
st
respondent to the decision of the Supreme Court of Appeal in
Sentinel
Retirement Fund v Masoanganye
[5]
.
In this decision it was held that a member’s pension benefit
cannot be the subject of a restraint order in terms of section
26 of
POCA. The Court based its conclusion in this regard on two grounds:
[9]
Firstly, it referred to section 37A(1) of
the PFA, which provides that no benefit provided for in the
rules of
a registered fund, or the right to such benefit, shall be liable to
be attached or subjected to any form of execution
under a judgement
or order of a court of law. In this respect the Court found that a
restraint order in terms of section 26 of
POCA constitutes both an
attachment and a form of execution under an order of a court of law
within the meaning of section 37A
of the PFA. The Court referred with
approval to the judgement in
Van
Heerden and Another v Director of Public Prosecutions and another
[6]
where it was found that, if by virtue of section 37A(1), a pension
benefit cannot be realised in satisfaction of a confiscation
order,
it would appear to follow that it cannot be restrained in terms of
section 26 of POCA.
[10]
Secondly, the Court pointed out that section
14(1)(a) of POCA provides that “any property held by
the
defendant concerned” shall be realisable property for the
purposes of a restraint order. The Court held that a member’s
benefit belongs to the fund as long as it is in the hands of the
fund, and not to the member. This is so by virtue of section 5(1)(b)
of the PFA, which provides that all the assets, rights, liabilities
and obligations of a fund are deemed to belong to the fund.
The
pension benefit is thus not property held by the defendant.
[7]
[11]
On behalf of the Applicant it was submitted,
inter alia
, that
the Sentinel judgement is distinguishable from the present matter on
the facts. Although this is true, different facts do
not make
different law, because the legal principles remain the same. It was
further submitted on behalf of the Applicant that
the Sentinel
judgement did not refer or take into account the provisions of
section 37D of the PFA. Here counsel for the Applicant
specifically
had section 37D(1)(b)(ii) in mind, that provides that a fund may
deduct any amount due by a member to his employer
in respect of any
damage caused to the employer by reason of any theft, dishonesty,
fraud or misconduct by the member.
[12]
This submission of the Applicant’s counsel is not correct. In
the judgement reference is in fact made
to section 37D on more than
one occasion, and it therefore cannot be said that the learned Judges
of Appeal were not mindful of
the provisions of the section. Counsel
for the Applicant also advanced the submission that the pension funds
will eventually be
transferred to the Defendants, and then it will be
realisable. In this respect the Applicant is only seeking attachment
or restraint
for the time being, and not execution, it was contended.
[13]
Now whatever one can make of all the submissions
made on behalf of the Applicant, it is not for this Court
to decide
whether the Supreme Court of Appeal was correct in holding that a
member’s pension benefit cannot be the subject
of a restraint
order in terms of section 26 of POCA. This is so, because this Court
is bound by the decisions of the Supreme Court
of Appeal, and that is
the end of the matter for the Applicant. It follows that the
provisional restraint order in 2, 2.1, 2.2,
2.3 and 2.4 of the
rule
nisi
stand to be discharged. As for the costs, there is no reason
why costs should not follow the result. The 1
st
Respondent, as indicated herein before, was the only party opposing
the confirmation of the
rule
nisi
.
[14]
Furthermore, no reasons were advanced why 2.5 of the provisional
order should be discharged, and the confirmation
thereof remains
unopposed. The
rule nisi
has not yet been served on the 4
th
Defendant, with the result that the rule will be extended to another
date in his case and as far as it remains applicable to him.
[15]
The following order is made:
1.
The provisional restraint order in paragraphs 2, 2.1, 2.2, 2.3 and
2.4 of the
rule nisi
is discharged with costs, which costs
relate to the costs incurred by the 1
st
Respondent in
opposing the confirmation of the rule.
2.
The provisional restraint order in paragraph 2.5 of the
rule nisi
is confirmed, with no order as to costs as far as the 1
st
,
2
nd
and 3
rd
Defendants are concerned.
3.
The
rule nisi
is extended to 8 February 2024 for service of
the rule nisi, the founding affidavit and this judgement on the 4
th
Defendant.
4. The proceedings
for the confirmation or discharge of 2.5 of the
rule nisi
in
relation to the 4
th
Defendant is consequently postponed to
8 February 2024.
P.
J. LOUBSER, J
For
the applicant:
Adv.
S. Khumalo
Instructed
by:
The
State Attorneys
Bloemfontein
For
the 1
st
respondents:
Adv.
P. van der Berg SC
Instructed
by:
Shepstone
& Wylie Attorneys, Johannesburg
c/o
McIntyre van der Post, Bloemfontein
/roosthuizen
[1]
Act 121
of 1998, as amended
[2]
Act 24
of 1956
[3]
Section
7C(2)(a) of the PFA
[4]
Section
12(1) of POCA
[5]
[2018]
ZASCA 126
[6]
[2015]
ZAWCHC 96
[7]
Par 13
and 14 of the judgement